The Central Bank of Nigeria (CBN) has directed commercial banks to seek regulatory approval before making changes to their core banking software, according to two people familiar with the matter. The directive comes in response to the impact of ongoing technological transformation at some of the country’s largest banks.
At least four commercial banks have changed their core banking software since the second half of 2024. These costly and customization-driven changes have left millions of customers unable to access banking services. Many of these customers have shared their complaints on social media platforms.
The banks say they are working to resolve the issues, but the regulator’s intervention will increase pressure on them.
“The CBN has been frustrated with customer complaints against banks over the past few months, which is why she is intervening,” one of them said.
Another person familiar with the matter said the CBN’s directive is consistent with its responsibility as a regulator to protect customers. In February 2024, the CBN released a revised draft of the 2019 Revised Consumer Protection Regulations.
Delay in Regulations for Core Banking Software
Nevertheless, banking experts and customers are questioning the regulator’s long silence on the issue. Some expect regulators to fine banks as they have done in other countries. In 2012, Royal Bank of Scotland (RBS) was fined £56 million for a failed system upgrade that left more than six million customers unable to access their accounts.
“I’m still surprised that the CBN has not taken regulatory action against other banks. They should have fined them,” said a banking expert who asked not to be named.
One theory is that the CBN’s delay in intervention is due to the lack of a specific regulatory framework for changes to core banking platforms, said a person familiar with the matter. This issue is intended to be addressed by the new Directive.
